CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Foundation
Medicine, Inc. (NASDAQ:FMI) today reported financial and operating
results for the fourth quarter and year ended December 31, 2014.
Highlights for the quarter and year include:

Launched ICE 2™, the latest version of the company's Interactive
Cancer Explorer®, including a new feature called
PatientMatch™

The company reported total revenue of $18.7 million in the fourth
quarter of 2014, compared to $9.7 million in the fourth quarter of 2013
and $16.4 million in the third quarter of 2014. Revenue from clinical
testing in the fourth quarter of 2014 was $10.3 million, compared to
$5.3 million in the fourth quarter of 2013 and $9.8 million in the third
quarter of 2014. Total revenue for the year ended December 31, 2014 was
$61.1 million, compared to $29.0 million in 2013.

The company reported 7,233 clinical tests in the fourth quarter of 2014,
a 93% increase from the fourth quarter of 2013 and a 13% increase from
the third quarter of 2014. This clinical test number includes 6,216
FoundationOne® tests and 1,017 FoundationOne Heme tests. An
additional 2,009 tests were reported to pharmaceutical partners in the
fourth quarter of 2014. For the full year, the company reported 24,271
clinical tests compared to 9,095 tests in 2013. The 2014 number includes
20,555 FoundationOne tests and 3,716 FoundationOne Heme tests.

Revenue from pharmaceutical partners was $8.4 million in the fourth
quarter, representing a 92% increase from the same period in 2013 and a
25% increase from the third quarter of 2014. For the full year, revenue
from pharmaceutical partners was $24.4 million, compared to $14.2
million in 2013. These increases in revenue from pharmaceutical partners
highlight the company's leading and broadening role within targeted
oncology drug development.

"Commercial execution and growth rates were strong across both our
clinical and pharma customers in the fourth quarter, highlighting the
broad adoption of our comprehensive genomic profiling approach," said
Michael Pellini, M.D., president and chief executive officer of
Foundation Medicine. "We're also pleased with the achievement of many
strategic and operational milestones that culminated in the announcement
of a broad collaboration agreement with Roche, which we expect will
strengthen all aspects of our business, and will accelerate our efforts
to transform cancer care."

The company's knowledgebase of molecular information, FoundationCORE,
grew to approximately 35,000 clinical cases across a wide spectrum of
cancers. FoundationCORE is an asset being utilized by biopharma
customers through direct data product relationships and by physicians
through the PatientMatch feature of ICE 2. The company believes the
increasing scale of FoundationCORE will play an essential role in
enhancing clinical practice efficiency and enabling improved outcomes
for patients.

Total operating expenses for the fourth quarter of 2014 were $25.1
million, compared with $21.9 million for the third quarter of 2014. For
the full year, operating expenses were $86.9 million, compared to $59.1
million in 2013. Net loss was $13.3 million in the fourth quarter of
2014, or a $0.47 loss per share, and net loss for the full year was
$52.2 million, or a $1.87 loss per share. At December 31, 2014, the
company held $72.1 million in cash and cash equivalents.

Recent Highlights

In January, the company and Roche agreed to enter into a strategic R&D
collaboration and commercialization arrangements, and Roche agreed to
make a $250 million investment in Foundation Medicine. The complete
transaction is subject to Roche's acquisition of at least 52.4% and up
to 56.3% of the company's outstanding shares on a fully diluted basis
and the satisfaction of other closing conditions.

In December, the company launched ICE 2, the newest version of its Interactive
Cancer Explorer physician portal, including a new tool called
PatientMatch.

In December, the company commenced a strategic collaboration with
Flatiron Health to develop a proprietary cloud-based information
platform combining genomic and clinical treatment and outcomes data.

In December, molecular diagnostics veteran David J. Daly joined the
company as its chief commercial officer.

Throughout the fourth quarter, clinical data was presented supporting
the use of FoundationOne and FoundationOne Heme in solid and
hematologic cancers, including non-small cell lung, breast, upper
gastrointestinal, multiple myeloma and lymphoma.

In November, broad reimbursement coverage for FoundationOne and
FoundationOne Heme was announced by Priority Health.

In November, the NCCN published updates to its Clinical Practice
Guidelines in Oncology that endorse broader molecular profiling for
non-small cell lung cancer.

2015 Outlook

The company expects to report between 43,000 and 47,000 clinical tests
in 2015.

The company anticipates 2015 revenue will be in the range of $105 -
$115 million assuming completion of the Roche transaction in the
second quarter of 2015.

The company expects operating expenses in the range of $128 to $138
million.

The company expects to launch a cell-free DNA test in 2015.

Conference Call and Webcast Details

The company will conduct a conference call today, Tuesday, February 24th
at 4:30 p.m. Eastern Time to discuss its financial performance for the
2014 fourth quarter and full year and other business activities,
including matters related to future performance. To access the
conference call via phone, dial 1-855-420-0652 from the United States
and Canada, or dial 1-484-365-2939 internationally, and for either
number reference Foundation Medicine and provide the passcode 72249406.
Dial in approximately ten minutes prior to the start of the call. The
live, listen-only webcast of the conference call may be accessed by
visiting the investors section of the company's website at investors.foundationmedicine.com.
A replay of the webcast will be available shortly after the conclusion
of the call and will be archived on the company's website for two weeks
following the call.

About Foundation Medicine

Foundation Medicine (NASDAQ: FMI) is a molecular information company
dedicated to a transformation in cancer care in which treatment is
informed by a deep understanding of the genomic changes that contribute
to each patient's unique cancer. The company's clinical assays,
FoundationOne® for solid tumors and FoundationOne®
Heme for hematologic malignancies, sarcomas and pediatric cancers,
provide a fully informative genomic profile to identify the molecular
alterations in a patient's cancer and match them with relevant targeted
therapies and clinical trials. Foundation Medicine's molecular
information platform aims to improve day-to-day care for patients by
serving the needs of clinicians, academic researchers and drug
developers to help advance the science of molecular medicine in cancer.
For more information, please visit www.FoundationMedicine.com
or follow Foundation Medicine on Twitter (@FoundationATCG).

Foundation Medicine®, FoundationOne®
and Interactive Cancer Explorer® are registered
trademarks of Foundation Medicinein the United States,
and several of these marks are in registration in other countries.ICE 2™, FoundationCORE™ and PatientMatch™ are trademarks of
Foundation Medicine.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, but not limited to, statements regarding the ability of the
Roche collaboration to strengthen Foundation Medicine's business; the
ability of FoundationCORE to affect clinical practice and patient
outcomes; the number of tests to be conducted, the generation of
revenue, and the incurrence of operating expenses in 2015; the launch of
a cell-free DNA assay test; the planned completion of the collaboration
between Foundation Medicine and Roche; and the acquisition of shares of
Foundation Medicine common stock by Roche. All such forward-looking
statements are based on management's current expectations of future
events and are subject to a number of risks and uncertainties that could
cause actual results to differ materially and adversely from those set
forth in or implied by such forward-looking statements. These risks and
uncertainties include the risks that Foundation Medicine's test,revenue
or operating expense projections may turn out to be inaccurate because
of the preliminary nature of the forecasts; the launch of a cell-free
DNA assay is delayed or discontinued; the company's expectations and
beliefs regarding the future conduct and growth of Foundation Medicine's
business are inaccurate; Foundation Medicineis unable to achieve
profitability, to compete successfully, to manage its growth, or to
develop its molecular information platform; uncertainties as to the
timing of the Roche transactions; uncertainties as to the percentage of
shares of Foundation Medicine stock Roche will acquire in the
transaction; the possibility that various closing conditions for the
Roche transaction may not be satisfied or waived; the effects of
disruption caused by the Roche transaction making it more difficult to
maintain relationships with employees, collaborators, vendors and other
business partners; and the risks described under the caption "Risk
Factors" in Foundation Medicine's Annual Report on Form 10-K for the
year ended December 31, 2013, which is on file with the Securities and
Exchange Commission, as well as other risks detailed in subsequent
filings with the Securities and Exchange Commission, may be realized.
All information in this press release is as of the date of the release,
and Foundation Medicine undertakes no duty to update this information
unless required by law.

In connection with the proposed transactions, Roche Holdings, Inc.
has filed a Tender Offer Statement on Schedule TO, and Foundation
Medicine has filed a Solicitation/Recommendation Statement on Schedule
14D-9, with the SEC. Also, Foundation Medicine has filed a definitive
proxy statement with the SEC, which includes information concerning the
interests of Foundation Medicine's participants in the proposed
transactions.INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE TENDER OFFER STATEMENT, THE SOLICITATION/RECOMMENDATION STATEMENT,
AND THE PROXY STATEMENT, AS THEY MAY BE AMENDED FROM TIME TO TIME,
BECAUSE THEY CONTAIN IMPORTANT INFORMATION.Investors and
security holders may obtain a free copy of these materials and other
documents filed with the SEC at the website maintained by the SEC at www.sec.gov
or at the "Investors & Press" section of Foundation Medicine's website
at www.foundationmedicine.com.

FOUNDATION MEDICINE, INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

2014

2013

2014

2013

Revenue

$ 18,680

$ 9,662

$ 61,079

$

28,990

Costs and expenses:

Cost of revenue

8,022

4,204

27,434

11,659

Selling and marketing

8,244

4,602

28,997

12,326

General and administrative

8,976

7,512

27,302

21,865

Research and development

7,839

6,834

30,629

24,901

Total costs and expenses

33,081

23,152

114,362

70,751

Loss from operations

(14,401

)

(13,490

)

(53,283

)

(41,761

)

Other income (expense):

Interest income (expense), net

1

(33

)

(42

)

(235

)

Other income (expense), net

1,103

432

1,103

(948

)

Total other income (expense), net

1,104

399

1,061

(1,183

)

Net loss

$ (13,297

)

$ (13,091

)

$ (52,222

)

$

(42,944

)

Accretion of redeemable convertible preferred stock

—

—

—

(139

)

Net loss applicable to common stockholders

$ (13,297

)

$ (13,091

)

$ (52,222

)

$

(43,083

)

Net loss per common share applicable to common stockholders, basic
and diluted